In the fast-paced global competition in digitalisation, successes and failures are ruthlessly measured every year. According to the European Commission’s recently published Digital Economy and Society Index (DESI), Estonia ranks highest among public digital services and IT capabilities in human capital. However, it also highlights how even small hick-ups can temporarily set countries back on their digital path, and how countries can learn from each other’s mistakes.
Estonia’s strong position in converging Europe
The European Commission has measured the digitalisation of its member states since 2014 using DESI. However, in 2021 it upped the ante by presenting Europe’s Digital Compass – a vision for Europe’s digital transformation by 2030 based on the empowerment of citizens and technological leadership – and updated the DESI to better reflect targets set in the agenda.
The recently published report shows that Estonia is still leading in the digitalisation of public services. The report highlights that both the public and private sector are used to carrying out administrative tasks online in a manner that are user-centred and very accessible.
Overall, the EU’s digitalisation is converging.
Overall, the EU’s digitalisation is converging. While the frontrunners have remained unchanged over the years, there are signs of clustering around the EU average. Importantly, those Member States that had a lower level of digitalisation 5 years ago are progressing at a faster pace than the rest. However, the aim of the index is not to give confidence to member states to remain resting on laurels. For Luukas Ilves, Estonian Government Chief Information Officer, the main strength of the index is in provoking a discussion about how to manage digital development in the best way possible.
“In Europe, we benefit the most if we work together. Because it is our overall success that makes it easier for companies and individuals to operate in Europe as a whole, not in individual countries, and make Europe stronger globally” he says. “Therefore, there is plenty to learn even from those countries who trail behind in the index, because, as a result, many of them have prioritised digitalisation and made bold reforms.”
High pace produces big consequences from small challenges
Estonia’s overall position has fallen slightly, and we now rank 9th in the index. According to the DESI, the main reason behind this is lagging in developing 5G networks in Estonia. This is an example of the high-paced competition, where even a year of legal litigations – something that happened in Estonia – can halt the overall progress. Estonia gave out the first 5G licences this spring and is preparing the National Broadband Plan in the fall. As a result, according to Krister Kruusmaa, counsellor in digital questions of the Ministry of Economic Affairs and Communications, Estonia’s connectivity is about to improve.
Among this turmoil, where even relatively small obstacles produce changes in the position of countries, one might wonder, what’s the rush with digitalisation?
“The European Union in general, and Estonia, too, have to keep up with our partners in South-East Asia, Japan, the US, and with the global competition with China,” Mr Kruusmaa says. “But in doing so, the EU upholds its core values and must remain human-centric. For example, our AI shall never be used for social credits. Thus, we must keep moving fast, but also carefully.”
Cooperation advances digital intensity
Two indicators in the DESI index measure the digital potential of the society at large: human capital in digital skills and IT specialisation, and the prevalence of digital tools in small and medium sized enterprises (SME-s). While Estonia is just above the EU average for basic digital skills, the country has the highest proportion of ICT graduates and outperforms ICT specialists in employment in the EU. It displays achievements such as opening a free education centre code / Jõhvi for IT specialists in the former industrial region in Eastern Estonia.
Still, in the percentage of SMEs using digital tools such as machine learning, or big data, Estonia is lagging. The report urges Estonia to take this area seriously. And there are already indicators that this field is likely to change. Just this year, Estonia’s AI & Robotics Estonia (AIRE) became the partner of European Digital Innovation Hubs, a network of about 200 centres over Europe that support the digitalisation of SMEs. AIRE offers specialized trainings and know-how for SMEs to bring established companies up to date with new possibilities.
However, according to both Mr Ilves and Mr Kruusmaa, the key for supporting SMEs comes from the cooperation between the state and the entrepreneurs more broadly. “We can already see in Estonia that the private sector produces innovation fastest in those sectors where it can cooperate with the public sector, such as health, agriculture, or energy,” Mr Ilves pointed out.
As another example, Mr Kruusmaa highlighted the development Estonia’s unique public sector interoperable network of AI applications, Bürokratt that will in future allows access to public sector services in one place using voice commands. While this development is remarkable on its own, Bürokratt and its various parts are open source, thus they can be easily adapted and reused by SMEs, lowering the threshold for using such advanced technologies.
“Additionally, we are looking to develop Bürokratt so that it functions through Google Alexa or Apple Siri, without losing compliance with GDPR or compromising data integrity,” Mr Kruusmaa suggests. “We believe that this kind of modularity is setting trends in Europe.”
Hence, DESI country reports are thus a valuable source of learning from other countries and keep pushing one’s own agenda.